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On-premises contact center technology on the decline

On-premises contact centers are decreasing in popularity as more organizations look to cloud-based and hosted services for their contact center technology.

According to a recent Gartner Magic Quadrant report on contact center infrastructure, a number of vendors in the market are seeing sales drop for on-premises services as midmarket and large organizations show an increased preference for cloud-based contact center as a service (CCaaS).

Several drivers push organizations toward cloud contact center. For instance, organizations are looking to decouple unified communications (UC) and contact center infrastructure, move from capex to opex cost models and reduce total cost of ownership.

The adoption of CCaaS affects how vendors offer on-premises contact center technology. Many vendors are evolving their offerings from primarily on-premises services to include cloud-based capabilities. Several vendors in the Gartner report have made acquisitions to strengthen their cloud-based offerings, including Cisco’s BroadSoft acquisition, Mitel acquiring ShoreTel and Avaya’s Spoken acquisition.

Several other factors are influencing the market. Traditionally, contact center infrastructure purchases have been linked to an organization’s telephony vendor. However, as organizations tie telephony decisions to their broader UC strategies, they want flexibility from their contact center technology if they switch telephony vendors, according to the report.

For example, some organizations use Microsoft Skype for Business for telephony, but Microsoft doesn’t offer robust contact center infrastructure. As a result, organizations may select a contact center infrastructure vendor whose enterprise communications application business is not heavily tied to an enterprise telephony or UC product suite, according to the report.

Additionally, organizations are looking to add multichannel engagement by adding non-voice channels, such as web chat and email, to their customer service environments, the report found. For the past five to 10 years, organizations have looked to customer relationship management (CRM) offerings for these additional features, since contact center infrastructure has traditionally focused on telephony.

However, more contact center vendors are adding non-voice channels, which create a significant technology overlap with CRM. While few vendors in both markets overlap, Gartner anticipates the two markets will merge over the next several years.

Tied to the push for multichannel engagement is the shift to a holistic view of customer engagement, which includes breaking down communication channel silos and creating an integrated view of customer activities and workflows. However, multichannel engagement is still in the early phases of adoption and Gartner found more vendor hype than actual deployment in organizations.

Cisco, Genesys and Avaya were named market leaders in the report. Aspect Software and SAP were named visionaries. Huawei, Enghouse Interactive, Mitel and NEC were named challengers. Vocalcom and ZTE were named niche players. Unify was dropped from the report since it did not meet Gartner’s criteria for premises-based contact center product and service revenue.

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